China’s largest automaker, SAIC Motor, is planning to buy a 1% stake in General Motors for $500 million in this week’s initial public offering. Foreign investors, like China, appear set to take a 4% interest in the carmaker when it goes ahead with its planned sale of $10 billion of common stock and $3 billion of preferred. Uncle Sam, after a controversial $50 billion rescue, holds 61% of GM’s shares.
Washington, as a practical matter, could use Beijing’s money to pull off such a large offering. But should China be allowed to buy part of the American icon? There are reasons to say “yes.”
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